TMI Blog2020 (3) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... orpn. [ 2010 (8) TMI 35 - SUPREME COURT] would not come into operation in facts of the case. We are therefore of the opinion that order passed by the Commission does not call for any interference. When we compare the disclosure made by the assessee to the tune of ₹ 11,33,02,651/- in the application filed before the Settlement Commission and the grievance made by the writ-applicant with regard to the amount of ₹ 2,04,88,560/-, the same is very marginal as compared to the disclosure made by the assessee. Accordingly, when the assessee had agreed for addition of ₹ 1,02,44,280/-to put quietus to the issue and to settle the matter, no interference is called for in the impugned order passed by the Settlement Commission. The petition, therefore, fails and is accordingly dismissed. - R/Special Civil Application No. 2760 of 2020 - - - Dated:- 10-2-2020 - HONOURABLE MR. JUSTICE J.B. PARDIWALA AND HONOURABLE MR. JUSTICE BHARGAV D. KARIA Mrs Mauna M Bhatt for the Petitioner ORAL ORDER PER: HONOURABLE MR. JUSTICE BHARGAV D. KARIA 1. By this petition under Article 226 and 227 of the Constitution of India, the petitioner has challenged the order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has provided detailed submission explaining the reason for obtaining such a valuation report in the year 2010 contending that the amount of ₹ 2,04,88,560/- should not be treated as undisclosed investment and any addition in this regard is unwarranted and has relied on the decision of Hon'ble Gujarat High Court in case of Commissioner of Income Tax Vs. Mrugesh Jaykrishna [2000] 109 TAXMAN 89 (GUJ). However, without prejudice to his contentions, the applicant submits that even though he does not agree with the addition of ₹ 2,04,8,560/- proposed by the PCIT as undisclosed investment, to put quietus to the issue and to settle the matterthe applicant agrees to 50% of the addition (i.e. ₹ 1,02,44,280/-) proposed by PCIT in AY 2010-11. Accordingly, a sum of ₹ 1,02,44,280/- is being added to the income of the applicant in Asst. Yr. 2010-11. 5. The Settlement Commission arrived at the aforesaid findings and accepted the consensus given by the assessee so as to put quietus to the issue to settle the matter on the basis of explanation given by the assessee to the effect that in the year 2010, the assessee was contemplating to make investment into real estat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the function performed by the Commission and keeping in view the principles of judicial review. May be, there is also some force in what Dr. Gauri Shankar says viz., that the order of commission is in the nature of a package deal and that it may not be possible, ordinarily speaking, to dissect its order and that the assessee should not be permitted to accept what is favourable to him and reject what is not. According to learned counsel, the Commission is not even required or obligated to pass a reasoned order. Be that as it may, the fact remains that it is open to the Commission to accept an amount of tax by way of settlement and to prescribe the manner in which the said amount shall be paid. It may condone the defaults and lapses on the part of the assessee and may waive interest, penalties or prosecution, where it thinks appropriate. Indeed, it would be difficult to predicate the reasons and considerations which induce the commission to make a particular order, unless of course the commission itself chooses to, give reasons for its order. Even if it gives reasons in a given case, the scope of enquiry in the appeal remains the same as indicated above viz., whether it is,contrary t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bind the authorities under the Act in proceedings relating to other assessment years. 6.1) Learned Senior Counsel for the respondent assessee further relied upon the decision of this Court in case of Commissioner of Income-tax-I v. Income Tax Settlement Commission reported in (2017) 390 ITR 306 (Gujarat) dated 12th July, 2016, wherein this Court has held as under : 10. It can thus be seen that on the issue of true and full disclosure, stage at which such disclosures should be made and the effect of making further disclosures by revising initial offers of settlement was examined by the Supreme Court in the case of Ajmera Housing Corporation (supra). The manner in which the Supreme Court has dealt with such issue and has made elaborate and conclusive observations, it cannot be stated contrary to what was argued before us that the above-noted portion of the judgment should not be seen as ration of the judgment of the Supreme Court. Ratio of this judgment is that the true and full disclosure of the income must be made at the initial stage and large scale remissions in such disclosure itself would show that the initial disclosures were not true. 11. However, the facts of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication of judgment in the case of Ajmera Housing Corporation (supra). 6.2) Reliance was also placed on the decision of the Court in case of Commissioner of Income-tax-I v. Income Tax Settlement Commission and anr. reported in (2017) 244 Taxman 156 (Gujarat) dated 2nd September, 2016, wherein it is held as under : 8. In view of the above facts and circumstances, more particularly, in view of the fact that this Court is dealing with and examining the order of said commission in exercise of writ jurisdiction keeping in view the scope of judicial review and keeping in view the exercise of extra ordinary jurisdiction, this Court is of the opinion that from the overall background of the fact without said Commission has thoroughly examined minutely all the details related to the issue in question and arrived at a particular finding which this Court found not to substitute the same. In the background of these facts and circumstances, resultantly, the petition deserves to be dismissed. 6.3) Reliance was also placed on the decision of this Court in case of Principal Commissioner of Income-tax, Central v. Income Tax Settlement Commission reported in (2017) 249 Taxman 54 (Guj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rore, which was approximately five times the amount originally disclosed, came to be made. Besides, in that case, a revised settlement application had been made and it is in the backdrop of such facts and circumstances that the Supreme Court held that full and true disclosure of income which had not been previously disclosed by the assessee being a precondition for a valid application under section 245C(1) of the Act. The scheme of Chapter XIXA does not contemplate revision of income so disclosed in the application against item 11 for the form. The court further held that if an assessee is permitted to revise his disclosure, in essence, he would be making a fresh application in relation to the same case by withdrawing the earlier application and that in this regard, section 245C(3) of the Act which prohibits the withdrawal of an application once made under sub-section (1) of the said section is instructive inasmuch as it manifests that an assessee cannot be permitted to resile from his stand at any stage during the proceedings. 51. Adverting to the facts of the present case, as noticed earlier, the contesting respondents have not resiled from their stand in the application made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to examine and inquire as to whether the order of Commission is contrary to any of the provisions of the Act or not and if so, apart from grounds of bias, fraud and malice which of-course constitute a separate and independent category, has it prejudiced the petitioner or not. In facts of the present case, merely because the respondent assessee has disclosed additional income of ₹ 12 Crore during the course of settlement, it cannot be said that Commission has not followed the procedure prescribed under the Act of 1961. 9. The disclosure made during the course of the proceedings before the Commission is not new disclosure as found by the Apex Court in case of Ajmera Housing Corpn. (supra) as under : 26. The procedure laid down in Section 245D of the Act, contemplates that on receipt of the application under Section 245C(1) of the Act, the Settlement Commission is required to forward a copy of the application filed in the prescribed form (No. 34B), containing full details of issues for which application for settlement is made, the nature and circumstances of the case and complexities of the investigation involved, save and except the annexures, referred to in item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner. In our opinion even when the Settlement Commission decides to proceed with the application, it will not be denuded of its power to examine as to whether in his application under Section 245C(1) of the Act, the assessee has made a full and true disclosure of his undisclosed income. We feel that the report(s) of the Commissioner and other documents coming on record at different stages of the consideration of the case, before or after the Settlement Commission has decided to proceed with the application would be most germane to determination of the said question. It is plain from the language of sub-section (4) of Section 245D of the Act that the jurisdiction of the Settlement Commission to pass such orders as it may think fit is confined to the matters covered by the application and it can extend only to such matters which are referred to in the report of the Commissioner under subsection (1) or sub-section (3) of the said Section. A full and true disclosure of income, which had not been previously disclosed by the assessee, being a pre-condition for a valid application under Section 245C(1) of the Act, the scheme of Chapter XIX-A does not contemplate revision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission even though it was convinced that the assessee had not made full and true disclosure of their income while making application under Section 245C of the Act. As stated above, in its earlier order dated 28th July, 2000 while declaring order dated 17th November, 1994, as ab initio void and setting aside order dated 29th January, 1999, the High Court had remitted the case to the Settlement Commission to decide the entire matter afresh, including the question of maintainability of the application under Section 245C(1) of the Act. The said order of the High Court was put in issue before this Court and was set aside vide order dated 11th July, 2006 and the case was remanded back to the High Court for fresh consideration. Nevertheless, all points raised by the parties, including the plea of the revenue that the application filed by the assessee before the Settlement Commission was not maintainable as the assessee had not made a full and true disclosure of their undisclosed income were kept open. The High Court addressed itself on the said issue and found that the assessee had not made a full and true disclosure of their income while making the application under Section 245C(1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of their undisclosed income and the manner in which such income had been derived. However, we say nothing more on this aspect of the matter as the Commissioner, for reasons best known to him, has chosen not to challenge this part of the impugned order. 32. We shall now deal with the principal argument of learned counsel for the assessee that the High Court had failed to consider, in their correct perspective the two reports submitted by the Commissioner on 30th August, 1995 and 20th October, 1997, in as much as, in the latter report the Commissioner had himself computed the undisclosed income at ₹ 42.52 crores, which was equivalent to the amount finally determined by the Settlement Commission. Therefore, according to the learned counsel, there was no justification for the remand of the case back to the Settlement Commission. At the first blush, the argument appears to be attractive but on a deeper scrutiny, it does not merit acceptance. In the impugned order, on a critical examination of the order passed by the Settlement Commission with reference to the said two reports, in particular the reconciliation report submitted by the Commissioner on 20th October, 1997, es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication for order of remand by the High Court and that the order passed by the Settlement Commission should have been affirmed. We are satisfied that under the given scenario, the High Court was correct in making the order of remand and no good ground is made out for interference in exercise of our jurisdiction under Article 136 of the Constitution. 33. As regards the argument of learned counsel for the assessee that the scope of judicial review being limited, the High Court should not have interfered with the order of the Settlement Commission in exercise of its power under Article 226 of the Constitution, in our opinion, the argument is stated to be rejected. Having conceded before the High Court that the assessee was not pressing the point of maintainability of the writ petition before the High Court, the assessee cannot be now permitted to resile from its earlier stand and raise the same issue before us. Even otherwise, as stated above, we have no hesitation in observing that the manner in which assessee's disclosures of additional income at different stages of proceedings were entertained by the Settlement Commission, rubbishing the objection of the Commissioner that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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